We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Factors Influence Asset Prices?

Malcolm Tatum
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Asset pricing is something that can change on a regular basis, depending on what is happening in the world and how those events impact the market in which the asset is traded. A wide range of events can cause asset prices to increase or decrease, depending on what is happening. Some of the more common factors that play a role in what happens with the value of a given asset is changes in supply and demand, political and other news events that may have some relationship to the asset in question, and projections of the future worth and desirability of the asset.

One of the key factors that affect asset prices are changes in supply and demand for the asset. Should consumer demand for the asset begin to subside, the price is likely to be lowered in an attempt to bolster sagging sales. For example, if some new technology renders the products offered by a given company obsolete, the shares of stock issued by that company will begin to lose value as the demand for those products begin to fall. Unless the company is able to refine, repurpose, or in some way enhance its product line and attract new customers, the price of the shares will continue to decline.

In like manner, a change in supply can also make a difference with asset prices. When events like adverse weather conditions result in a reduction of the availability of an asset, the demand is likely to increase, which in turn will drive up the asset price. By the same token, when the number of housing lots in a desirable location are decreased for some reason, the prices associated with any of those lots that come up for sale will increase drastically over the prices that prevailed in times past.

News can also have an impact on asset prices. Changes in leadership in various companies may cause the price of stocks to rise or fall, depending on whether the changes are seen as good or bad by consumers and the business community in general. News of an impending war may drive down asset prices for some goods while increasing the prices associated with others. Even the results of a political election will likely have some impact on the prices of certain assets, positive or negative.

An ongoing factor that influences asset prices is the projections of how those assets will perform in the future. Investors will often choose stocks based on what they anticipate will happen with the asset prices a year, two years, or even ten years down the road. In like manner, a real estate investor will choose residential and commercial investments based on whether the asset prices are likely to appreciate or depreciate within a given time frame. Understanding the factors that are likely to impact asset prices and then projecting how those factors will make a difference makes it easier to avoid losses while improving the chances of earning a return over time.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.